MARK KOHLERMain Street Professionals, Main Street Professionals, Main Street Professionals, Main Street Professionals, Main Street Professionals, LLC · Owner at Main Street Professionals, LLC

The IRS Rule That Makes Holiday Parties 100% Tax-Deductible (IRS Code 274E)

3 Dec 2025 · 1 min

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Mark Kohler explains IRS Code 274: holiday parties and company events are 100% deductible if they boost employee morale, aren't lavish, and focus on employees rather than owners. Spouses can attend, but too many owners or their families kills the deduction.

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This is IRS code 274. There are three requirements to pull this off. And by the way, doing something social and entertainment oriented is okay because you're building company morale, team building. So the three requirements are it must promote well being, morale and team building. Number two, not be lavish or extravagant. And number three must be primarily for employees, not owners. Now, I think we could probably pull off spouses and be okay, but what they're worried about is the owners and their families are the ones there. Yeah, the majority of them there. That's where it's going to get shot down. But the company holiday parties, summer picnics, annual celebrations, 100% deductible for the meals and the entertainment.